USD/CNH Price Analysis: Rises to two-week highs despite impending “death cross”

USD/CNH has jumped to two-week highs at 6.92.
The daily chart shows an impending death cross – bearish, but a lagging indicator.
The bulls need a break above key resistance at 7.0142.

Omkar Godbole FXStreet Contributor

USD/CNH is trading near 6.92, the highest level since Jan. 9.

The pair is gaining altitude despite impending death cross – a bearish crossover of the 50- and 200-day moving averages (MA).

The 50-day MA, currently at 6.9821, is trending south and looks set to cross below the 200-day MA in the next day or two. The longer duration average is currently flatlined near 6.9758.

The death cross is widely considered an indicator of a bear market. However, it is a lagging indicator as MAs are based on historical data. The bearish cross, therefore, is the result of a prolonged sell-off and often works as a contrary indicator.

Put simply, the impending death cross on USD/CNH should not be a cause for concern for the bulls. The pair could test the former support-turned-resistance of 7.0412 (Dec. 12 low). A close higher would expose the 200-day MA at 6.9758.

On the other hand, a strong rejection at 7.0412 would shift risk in favor of a re-test of recent lows near 6.85.

Daily chart

Trend: Bullish above 7.0412

Technical levels

USD/CNH

Overview
Today last price	6.9178
Today Daily Change	0.0087
Today Daily Change %	0.13
Today daily open	6.9091

Trends
Daily SMA20	6.9304
Daily SMA50	6.9838
Daily SMA100	7.0331
Daily SMA200	6.9791

Levels
Previous Daily High	6.9182
Previous Daily Low	6.896
Previous Weekly High	6.9159
Previous Weekly Low	6.8581
Previous Monthly High	7.0879
Previous Monthly Low	6.9048
Daily Fibonacci 38.2%	6.9045
Daily Fibonacci 61.8%	6.9097
Daily Pivot Point S1	6.8973
Daily Pivot Point S2	6.8856
Daily Pivot Point S3	6.8751
Daily Pivot Point R1	6.9195
Daily Pivot Point R2	6.93
Daily Pivot Point R3	6.9417

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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